The New York Stock Exchange welcomes E.l.f. Beauty on March 18, 2024, to celebrate its 20th anniversary of founding.
The CEO of E.l.f. Beauty, which manufactures about 80% of its cosmetics in China, told CNBC on Thursday that it was “relieved” the new tariff on Chinese imports is only 10%. The retailer isn’t sure yet if it will need to raise prices.
“[It] seems like a weird thing to say, but we actually were somewhat relieved when it was only 10 points because at one time, the rhetoric was as high as 60% tariffs,” Tarang Amin said when discussing his company’s fiscal third-quarter earnings results.
With regard to raising prices, he said, “we’ll see whether we need to.”
The comments come just days after President Donald Trump slapped a new 10% tariff on goods imported from China into the U.S., raising concerns about companies such as E.l.f. with significant supply chains in the region.
While 25% tariffs on Mexico and Canada have since been paused for 30 days, Beijing and Washington have yet to come to an agreement, and China has hit the U.S. back with a slew of retaliatory measures, including blacklisting Calvin Klein’s parent company PVH Corp.
The uncertainty around whether the new Chinese tariffs are here to stay has led some companies, such as Barbie maker Mattel, to say they will lean on price increases to offset the effect to profits. E.l.f. struck a similar tune in November when 60% tariffs still seemed like a possibility.
“We also want to play it out. There’s so much back and forth going on right now. If there was a higher level of tariff, we don’t want to announce our pricing actions until we know kind of where we feel it’s really going to settle out,” he explained.
When Trump put new 25% tariffs on China during his first term, Amin said the company raised prices on a third of its items by $1 and saw a “good consumer response,” even with its reputation for offering more affordable “dupes” of prestige cosmetics at drug store prices.
At the time, E.l.f. was manufacturing nearly 100% of its goods in China. This time around, it is in a better position after reducing its reliance on the region by about 20%. It also has a bigger international business and does more sales outside of the U.S.
“The good thing, because we do have a long supply chain … we won’t face it this fiscal year. It won’t be until about, you know, well into our [fiscal year 2026] before we start seeing the value of that higher inventory,” said Amin. “So we have time to really make sure we have the playbook.”
